ENTREPRENEURIAL OPERATIONS
INVENTORY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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carrying cost
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purchasing cost
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ordering cost
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stockout cost
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Detailed explanation-1: -In marketing, carrying cost, carrying cost of inventory or holding cost refers to the total cost of holding inventory. This includes warehousing costs such as rent, utilities and salaries, financial costs such as opportunity cost, and inventory costs related to perishability, shrinkage (leakage) and insurance.
Detailed explanation-2: -The cost which is incurred to store the goods is called a warehousing cost. This may includes rent of ware house and insurance of warehouse. This cost is an item of distribution overheads.
Detailed explanation-3: -The overall cost of keeping unsold products, known as inventory carrying cost, is the total of all these charges. Intangibles such as depreciation and lost opportunity costs are included in the total. The costs associated with creating and processing an order for a supplier are known as ordering costs.